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macro trader
Writes about financial history, markets, and the speed of information. Editor of Too Late.
By summer 1981 the Federal Funds Rate was near 20 percent, unemployment was climbing, and Congress was openly threatening Paul Volcker's job. He held the line. The harder counterfactual is the one where he did not.
By August 1971 foreign dollar holdings were roughly four times US gold reserves. A run on Fort Knox was a credible scenario by year end. Nixon's Sunday-night announcement was the politically loud way to break the system. The quieter path would have broken something larger.
On September 23, 1998, William McDonough locked fourteen bank CEOs in a room at the New York Fed and did not let them leave until they had agreed to recapitalize a failing hedge fund. The case for letting it die instead is stronger than the rescue's defenders admit.
On August 24, 1857, a single trust company failed in Cincinnati. By the end of the day the news was on every East Coast trading desk by telegraph. By October it had reached London, Hamburg, and Liverpool. The first crash where information moved faster than rumor.
Long-Term Capital Management had the best quants on Wall Street and a trading model that had never lost money. In September 1998 it needed a Fed-orchestrated rescue to avoid taking the global banking system down with it.
In November 1923 a loaf of bread in Berlin cost 200 billion marks, up from a few marks two years earlier. Workers were paid twice a day because the afternoon wage was worthless by evening. How does a functioning economy lose its money this completely in 18 months?
For 66 years a Depression-era law made it illegal for the bank holding your savings to also trade exotic derivatives. In November 1999 Congress removed the wall on a 90-to-8 Senate vote. Nine years later the largest financial crisis since the Depression arrived.
A short note on why this site exists. History, making money, and timelines. That's most of it.
Nathan Rothschild did get early news of Waterloo. He did not make the fortune of legend from it. The version everyone knows was invented in 1846 by an antisemitic Parisian pamphleteer.
The 1637 Dutch tulip crash is the template every bubble gets compared to. The truth is smaller, stranger, and mostly limited to rich people.
Isaac Newton, Master of the Royal Mint, sold South Sea Company stock early, watched his friends get rich, bought back in at the top, and lost roughly twenty thousand pounds.
For four days in 1907, a single banker privately saved the US financial system from his home office on 36th Street. Congress was so alarmed it created the Federal Reserve six years later.
The Fed's twelve regional banks, its weird public-private structure, and its resistance to a single board exist because the 1913 Act could not have passed any other way.
Luca Pacioli did not invent double-entry bookkeeping. He wrote the first printed book that explained it clearly. Every annual report in the world still runs on his system.
Before 1844, a fast horse could make you rich by bringing London prices to Liverpool a day before anyone else. After the telegraph, that trade was gone in an afternoon.
Most people think the 1929 crash was one bad day. It was a week, inside a month, inside a three-year collapse that took the Dow down 89 percent.
The VOC was chartered to trade spices with Asia. Its funding model, a joint-stock structure with tradable shares, turned out to be more important than the spices.
The 'invisible hand' appears exactly once in the Wealth of Nations. Smith was deeply suspicious of corporations, skeptical of merchants, and anti-monopoly in ways both modern sides find inconvenient.
On a Sunday night in August 1971, Richard Nixon told a television audience that dollars would no longer be redeemable for gold. Every major currency in the world became pure fiat within hours.
In July 1944, 730 delegates from 44 nations negotiated a postwar monetary system in New Hampshire. The United States, which held two-thirds of the world's gold, was going to win every argument that mattered.
Inflation peaked at 14.8 percent in 1980. The Federal Reserve raised short-term rates to roughly 20 percent. It caused two recessions and killed the inflation psychology that had defined the 1970s.
In 1397 a Florentine banker set up branches in the major commercial cities of Europe. The network sent letters constantly. The family's actual product, more than loans, was intelligence.
The Nikkei peaked at 38,957 on December 29, 1989. It did not recover to that level until February 2024, thirty-four years later. Every modern central bank uses Japan as a reference manual.
Charles Kindleberger published Manias, Panics, and Crashes in 1978. The five-stage framework it proposes has described the shape of every major bubble from tulips to FTX.
A Scottish-born gambler and convicted killer arrived in Paris in 1716 with a theory about paper money. By 1720 he was Controller General of Finances. By 1721 the French economy was in ruins and he had fled to Venice.
Before the transatlantic telegraph, the fastest news between New York and London took eight days by ship. After, minutes. Cotton-price spreads between the two markets fell by more than a third in a year, and a whole profession of international arbitrage traders began a slow extinction that has not stopped.